When did school catalogs and course brochures qualify as printed sales messages, and what delivery route was required?

Plain-English summary

The official source combines two 1987 opinions. The first addressed college class schedules and community-education brochures. The second reviewed a brochure advertising an engineering review course for a fee.

The Board distinguished reference materials from promotional materials. A comprehensive listing of class offerings was generally a reference catalog and did not qualify. A catalog principally advertising a school to solicit prospective applicants for a fee could qualify. Without copies of the community-education brochures, the first opinion declined to classify them.

The second opinion reviewed an actual engineering-course brochure and found that it advertised a specific course for a fee, so it qualified as a printed sales message.

Delivery remained decisive. The printer had to send the brochures directly to the mailing house, which then mailed them free to prospective students. If the printer first delivered them to the course provider and the provider forwarded them to the mailing house, the sale was taxable.

What this means for you

Schools, course providers, printers, mailing houses, and tax professionals

Separate informational course listings from materials designed to recruit paying students. For qualifying promotional brochures, document uninterrupted printer-to-mailing-house delivery and free receipt by prospective students.

Common questions

Q: Did a comprehensive class schedule qualify?

A: Generally no. The opinion treated comprehensive class listings as reference materials.

Q: Could a school catalog ever qualify?

A: Yes, if its principal purpose was advertising the school to solicit prospective applicants for a fee.

Q: Did the engineering review-course brochure qualify?

A: Yes. It advertised a specific course for a fee.

Q: Could the school receive the brochures before mailing?

A: No. The opinion required the printer to deliver them directly to the mailing house; purchaser receipt made the sale taxable.

Citations and references

• California Revenue and Taxation Code § 6379.5

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Annotation page: Annotation 432.0100
• Original supporting opinion: 432.0100 PDF

Original ruling text

432.0100

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION
1020 N STREET, SACRAMENTO, CALIFORNIA
(P.O. BOX 942879, SACRAMENTO, CALIFORNIA 94279-0001)
(916) 445-6450

April 21, 1987

Mr. D--- P. El--Director of General Services
S--- M--- C--- C--- College District
XXXX --- Drive
--- ---, CA XXXXX
Dear Mr. E---:
This is in reply to your March 10, 1987 letter regarding the application of sales tax to sales of printed matter in light of recently enacted section 6379.5 of the Revenue and Taxation Code, which provides: “There are exempted from the taxes imposed by this part the gross receipts from the sale of, and the storage, use, or other consumption in this state of catalogs, letters, circulars, brochures, and pamphlets consisting substantially of printed sales messages for goods and services printed to the special order of the purchaser and mailed or delivered by the seller, the seller’s agent, or a mailing house, acting as an agent for the purchaser, through the United States Postal Service or by common carrier to any other person at no cost to that person who becomes the owner thereof.” Specifically, you asked whether your College Class Schedules and Community Education Brochures qualify as consisting substantially of printed sales messages for goods and services. The Board’s staff has taken the position that, for purposes of section 6379.5, “printed sales messages” is limited to those messages which principally advertise or promote the goods or services to which the printed matter relates. Applying such criterion to school catalogs, those catalogs which are generally reference materials, i.e. comprehensive listings of class offerings, do not qualify as printed sales messages. On the other hand, those catalogs which generally advertise a school to solicit prospective applicants for a fee do qualify as printed sales messages. Without a copy of the brochures to which you refer, we are unable to give you an answer as to whether the content of the printed matter qualifies as consisting substantially of printed sales messages under the statute. However, if you will send a copy of each of the brochures, we will be glad to provide you an opinion.

Mr. D--- P. E---

-2-

April 21, 1987
432.0100

For your further information, we are enclosing a copy of proposed Sales and Use Tax Regulation 1541.5, Printed Sales Messages. Although the regulation has not yet been adopted by the Board, it does reflect the staff’s views on how tax applies to sales of printed sales messages. Very truly yours,

R. L. Dick
Tax Counsel

RLD:sr
Enc.

432.0100

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION
1020 N STREET, SACRAMENTO, CALIFORNIA
(P.O. BOX 942879, SACRAMENTO, CALIFORNIA 94279-0001)
(916) 445-8485

May 13, 1987

Ms. L--- H--P--- E--- Institute
P.O. Box XXX
--- ---, CA XXXXX
Re:

SR -- XX-XXXXXX

Dear Ms. H---:
This is in response to your request for an opinion concerning whether sales of brochures advertising engineering review courses, if printed in California and mailed directly from a mailing house, would qualify for exemption from sales tax pursuant to Revenue and Taxation Code section 6379.5, which provides: There are exempted from the taxes imposed by this part the gross receipts from the sale of, and the storage, use, or other consumption in this state of catalogs, letters, circulars, brochures, and pamphlets consisting substantially of printed sales messages for goods and services printed to the special order of the purchaser and mailed or delivered by the seller, the seller’s agent, or a mailing house, acting as an agent for the purchaser, through the United States Postal Service or by common carrier to any other person at no cost to that person who becomes the owner thereof. We have determined in the past that circulars or brochures which advertise a specific course for a fee, may qualify as printed sales messages. After reviewing a copy of your brochure, we are of the opinion that the brochure advertises a specific course for a fee and therefore qualifies as a printed sales message. You state that the brochures are mailed directly from a mailing house. We note that in order to satisfy the mailing requirement of section 6379.5, the printer must deliver the brochures directly to the mailing house. If the brochures are delivered to you and you in turn deliver them to the mailing house to be mailed,

Ms. L--- H---

-2-

May 13, 1987
432.0100

the sales of the brochures would be subject to tax. Therefore, if the printer delivers the brochures directly to the mailing house to be mailed to prospective students and the students receive the brochure at no cost, the sale of the brochures qualify as tax exempt printed sales messages.

Very truly yours,

E. L. Sorensen, Jr.
Tax Counsel

ELS:md